Cash Advances and losing on stocks/options

[jribe]

as an "add" - most attorneys will not represent you in an AP if you didn't have an attorney in your BK filing. They do not liked being thrown in half way through- and just won't take the case. Those that do; will charge much more (i've heard anywhere from 5k-20k depending for an AP).

You should call some BK attorneys and ask them this (if they would represent someone in an AP that filed prose) that way you know for sure.

It would be really awful to file prose and then have objections and have no one represent you.

I definitely think you should amend your return. The trustees look closely at your last years return or in some districts your last two years. (I had to show two years of tax returns). Having the losses on the returns will help the trustee understand your overall case.

The credit card companies can dispute the individual charges in an AP and try to keep them from being discharged. In your situation, it is the later charges, the ones that happened in fall of '08 that am worried about. At that point you had already incurred large losses, and the credit card companies can say that you knew you were insolvent when you took those advances. I am not as worried about the balance transfers, as you can argue there that you were trying to save money by getting a lower interest rate.

The fact that you paid on the accounts is going to help here, like I said earlier. As for an attorney, it will be easier on you to have an attorney for the AP, that represented you in your chapter 7. Since you need to put a bit more time between now and filing, find an attorney and pay them off in installments, with the intent of filing in a couple of months.

I understand the part about not working. I did the same thing. After a lay-off in January, I kept my income low (just unemployment insurance) so that I would qualify for a chapter 7 instead of a chapter 13. Filing chapter 7 instead of chapter 13 is allowing me to go back to school and make some life changes I have been needing to do for a long time.

[jribe]

The reason i said that they may argue that you were insolvent is basically because of the things that were going on at the time. You essentially had no job- but were trading in stocks. That's okay (i'm in the industry) - however they can argue that you didn't have any guaranteed income (since everyone knows that the stock market is volitale you never know what will happen) and you kept using the cards anyway. To make things worse- it's refelcted as such on your tax returns. If you had a job- say making 50k a year, and you were doing this- they couldn't argue you were insolvent- just had some bad luck on your trades. But you didn't have income when you were doing all of this. That's really their "proof" of you being insolvent. The CC's are likely to argue that you were insolvent at the time- and thus had no way of paying back the charges. So they would likely file an AP and argue the discharge for those debts. This is why you need a good attorney. Most attorney's BTW will not take an AP from a person that filed prose.

Now on the job issue; if you've essentially had no income; you just need to make sure the job you get doesn't put you over the median for your state. It's pretty safe to say a job anywhere from 30-50k a year is ok. There's a six month look-back on income; so you just deal with that. It's better to have a job when you file than wait. You never know if an employer won't hire you beause of the BK (even though they won't say thats the reason).

These were not new cards that I suddenly had balances on. I was carrying balances for years and as I'm filling out the BK paperwork it asks me the timeframe that I incurred these debts which is the entire life of the card. How does the trustee even know when the majority of the debt was incurred? Or is it the CC companies that will bring that to the table if they raise objection?

I was "day trading", not a professional trader and not set as "mark to market" with the IRS. Someone said I should amend my return which is an excellent point and I should do that just so that stuff is on the return but I cannot write off the full amount unless I had already stated "mark to market" trader in early 2008, which I did not do. I will amend that return before I file though, I should have included it in my taxes... that was one more stupid thing I did.

The CC's can argue that I was insolvent but I have statements, prior to losing 50K in one trade in June, of very large payments from my earnings in the market, that were paying my cards down to zero, which is why they were increasing my available credit without me applying for it.

I DID make large payments on these cards from (Jun 08 thru Jan 09)

Don't they have to "prove" I had intent on not paying it back or is there just an "abuse" clause that states I had no business doing what I did? And I must then show that there was intent to pay them back??? This is the crux of the situation I guess. It's a good point you make.

The Sept/Oct timeframe in the market WAS an obvious disaster, but most the losses I incurred were before that, in Oct I was buying puts on the market betting it would go down further, while our government was propping up the stock market week to week with rhetoric and "programs" to keep the system from collapsing, hence, I incurred more losses.

I guess the issue really at this point is... how do I avoid the worst case scenario and what is that scenario? One of the reasons I'm filing this Pro Se is that even if I file through an attorney, if there is an objection that attorney will not represent me through that legal proceeding, so that $2K will be wasted. The other issue raised here is why don't i get a job... I'm afraid to start making any real money because I'm afraid that may cause me to not qualify for a chap 7.

Thank you all so much for your input, this is a great forum.

[swampwiz]

What if you reasonably believed that you had the ability to produce an income at a certain level because you had done so in the past? Let's say that you are doing fine and have taken a bit of a sabbatical, or maybe have retired, and that you always thought that you could go back to work at some time in the future.

[DeadManCrawling]

If you had some large transfers (using one card to pay off or pay down another), I think thoe creditors are most likely to object.

In this case, time is your friend. I would wait as long as possible before filing.